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SHOCK! US House swats trolls, passes patent 'extortion' bill

Innovation Act looks set to rush through Senate

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The US House of Representatives has momentarily put aside its internecine warfare and actually passed a bill aimed at stopping the worst excesses of the patent trolling business, and most of the technology industry is rejoicing at the news.

"Today Congress worked in bipartisan fashion to do the right thing and secure America's economic future," said Gary Shapiro, president of the Consumer Electronics Association.

"Patent trolling is garden-variety extortion by another name, and we are one step closer to shutting it down," he said. "I applaud today's vote to end frivolous patent litigation that is suppressing innovation, stifling economic growth and costing Americans tens of billions of dollars."

The Innovation Act, HR 3309, would ban patent trolls from suing end-users, rather than the manufacturer of a technology, for patent infringement, and would also require a much higher burden of proof in judgments.

In addition, patent holders would have to identify themselves directly in a case, rather than working through shell companies, and if a lawsuit fails they would have to pay the defendant's costs. Defendants would also have to incur fewer costs up front during the discovery phase of any trial.

"HR 3309 addresses this urgent problem by striking a balance that deters bad actors while protecting intellectual property rights," blogged Horacio Gutierrez, deputy general counsel at Microsoft.

"At its core," Gutierrez said, "the bill reduces the financial incentives for rogue players to pursue abusive patent litigation through calibrated measures that provide for fee shifting, curbing discovery abuse, requiring precision in claims of infringement, and promoting transparency in patent ownership."

Julie Samuels, senior staff attorney and holder of The Mark Cuban Chair to Eliminate Stupid Patents [Seriously?—Ed. Seriously.—Iain] at the EFF, said the fast, bi-partisan nature of the vote was highly encouraging. It now looks likely that the Senate should pass similar legislation by the end of the year, she said.

"The Innovation Act isn't perfect," Samuels said. "It doesn't go nearly far enough to reform the demand letter problem. Its provisions protecting consumers and end-users, while present, aren't as robust as we would hope. But the Innovation Act is nonetheless a huge step in the right direction."

Senator Patrick Leahy (D-VT) has already said he'll be pushing hard for the Innovation Act to get through the Senate as fast as possible, and President Obama has already indicated he'd sign off on the legislation. But Russ Merbeth, chief policy counsel for IP licensing firm Intellectual Ventures, counselled caution.

"We're not opposed to all, or even most measures in H.R. 3309," he told El Reg in a statement, "but even the best of them need a great deal more refinement and we are disappointed the House rushed to pass this bill. We hope the Senate recognizes the need for a deliberate and measured approach." ®

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